I first opened my email address back in 1998 during the Rwanda International Trade Fair when it used to take place at Amahoro stadium. The provider of the service was an internet cafe that was once popular in town. I was excited for being able to instantly communicate with my friends that lived in different parts of the world.
Many people did not have emails address at that time and were even ignorant what an email or internet service were. In a matter of less than two years, a big number of people had opened their first emails but had also started using internet for various reasons. These needs ushered the birth of internet cafe in town.
The latter became a good business opportunity for many entrepreneurs that jumped on the occasion. I cannot say how many entrepreneurs made a fortune out of internet cafes but I can only confirm that a bunch of them made fortune. Internet cafe spread in different parts of Kigali city even in villages throughout Rwanda.
Internet services used to take more than 70% of my pocket money as I was communicating with friends but also doing researches for scholarships opportunities that I could benefit. YouTube was my popular destination on the internet and I ended up spending more than I had planned.
This phenomenon was not unique to me as more and more people adopted internet services to the benefit of internet cafe owners. Two decades later internet cafes are no longer a profitable business ventures it used to be. A number of factors have contributed to their downfall.
The development of communication sectors over the last two decades is to be blamed. Back in 1998 Rwanda had only one Telecommunication Company which is still present: MTN Rwanda.
Actually Rwanda boasts two more telecommunication companies in the name of Airtel and Tigo Rwanda. According to Rwanda Utility Regulation Authority (RURA), Rwanda’s mobile penetration rate currently stands at 55 per cent of the country’s population of 10.5 million.
The latter made it possible for many people to own a mobile phone for the first time. Another factor that pushed internet cafes out of business is the government willingness to install internet connections in all its offices. Employees of government agencies which constituted a big number of internet cafes customers find themselves no longer in need of their services. As time goes on more private and public organizations followed the lead by installing the internet in their offices.
More and more internet cafes started closing their doors back in 2008 and it is only a handful of them that are remaining in town. Mobile technology came later to threaten them as telecommunications companies started giving affordable internet services to their customers.
As more and more people acquired mobile phones over the last five years, the downhill trend in internet cafe continued. People started accessing their emails on their mobile devices and did not have to go to internet cafes.
Creative destruction phenomenon took internet cafes out of business in a matter of less than two decades. Joseph Schumpeter describes creative destruction as the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
Though one cannot say that internet cafes are completely out of business, one can point out the fact that they are no longer a business venture it used to be back in early 2000`s. Creative destruction is slowly and steadily taking internet cafes out of business. We are expecting to see other forms of businesses as a result of EASY availability of internet services.
New forms of business models over the internet have already started marking Rwanda`s business landscape. Websites that offer a variety of services and products are flourishing and this is just the beginning of a new era.
Internet cafes were only able to remain a viable business in just one decade and half. One might wonder which business model is next under threat as a result of innovation in information technology. One thing that entrepreneurs have to keep in mind is that business models are evolving the same way as technology does. They have to stay awake and make sure that the next wave of innovations won`t take them out of business.